SpaceX buys xAI in record deal - Elon Musk seeks to merge AI and space ambitions
Elon Musk said SpaceX has acquired his artificial intelligence startup xAI in a record deal that brings together ambitions for artificial intelligence and space by combining the rocket and satellite company with chatbot creator Grok.
The deal represents one of the most ambitious collaborations in the tech sector to date, combining a space and defense contractor with a fast-growing artificial intelligence developer whose costs are largely driven by chips, data centers and energy. It could also bolster SpaceX's data center ambitions as Musk competes with rivals such as Alphabet's Google, Meta, Amazon-backed Anthropic and OpenAI in the space.
The transaction values SpaceX at $1 trillion and xAI at $250 billion.
"This marks not only a new chapter, but also the next book in SpaceX and xAI's mission: scaling to create a sentient sun to understand the Universe and extend the light of consciousness to the stars!" Musk said.
SpaceX was already the world's most valuable private company, last valued at $800 billion in an internal stock sale. XAI was last valued at $230 billion in November. The merger comes as the space company plans a major public offering this year that could value it at more than $1.5 trillion.
The deal further consolidates Musk's business empire and wealth into a tighter, mutually reinforcing ecosystem, what some investors and analysts informally call the "Mukonomy," which already includes Tesla, brain chip maker Neuralink and tunneling firm The Boring Company.
The world's richest man has a history of merging his ventures. Musk spun off social media platform X into xAI in a stock swap last year, giving the artificial intelligence startup access to the platform's data and distribution. In 2016, he used Tesla stock to buy his solar energy company SolarCity.
The deal could draw attention from regulators and investors over governance, valuation and conflicts of interest, given Musk's overlapping leadership roles at multiple firms, as well as the potential movement of engineers, proprietary technology and contracts between the entities.
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